[IMF Warns Stablecoins May Undermine Monetary Sovereignty, Suggests Limits to Prevent Substitution Risks] The latest report from the International Monetary Fund (IMF), *Understanding Stablecoins*, reveals that dollar-dominated stablecoins are rapidly penetrating emerging markets and developing economies, potentially weakening central banks' control over domestic liquidity and interest rates. The report points out that stablecoins can quickly enter markets via mobile phones and the internet, particularly in cases where unhosted wallets exist, making it easier to cause 'currency substitution,' reduce the use of local currencies, and impact central banks' monetary policy transmission and seigniorage revenue. The IMF recommends that countries establish legal frameworks to prevent stablecoins from obtaining 'legal tender' or 'official currency' status, thereby safeguarding financial sovereignty. Currently, 97% of the total market value of stablecoins is pegged to the US dollar, with only a small proportion linked to the euro or yen. The report also highlights that the use of stablecoins in cross-border payments and in countries with high inflation has significantly increased, particularly in Africa, the Middle East, and Latin America.